The head of Northern Ireland's police watchdog looks set to step down early from the post after a damning report questioned the independence of his office.

The hard-hitting review by the Criminal Justice Inspection group said Police Ombudsman Al Hutchinson had lost the trust of senior colleagues in an organisation it described as divided and dysfunctional.

It cited cases where criticism of police conduct in some of the most controversial murders of the Troubles was removed without explanation, sparking angry criticism from the victims of violence.

The former Canadian Mountie is now expected to tell a Stormont scrutiny committee on Thursday that he will leave the top job ahead of his expected retirement date of December 2012.

But Sinn Fein has already said anything short of an immediate departure would jeopardise efforts to salvage the image of his office, which is seen as a cornerstone of the region's new policing structures.

The critical report, compiled by Chief Inspector Michael Maguire, said: "Our overall conclusion is that the flawed nature of the investigation process in historic cases, the divisions within senior management, and concerns around the handling of sensitive material have undermined confidence in the work of the OPONI (Office of the Police Ombudsman for Northern Ireland) among some staff and key stakeholders. It is an urgent requirement that these issues are addressed in response to this report."

But Mr Hutchinson, who hinted at an early exit but also suggested he may seek to implement reform of his office over a period of months, welcomed the report's conclusion that he had largely succeeded in handling current police complaints.

On cases from the Troubles, Mr Hutchinson said of the findings: "I have now moved to address those areas of concern identified by the inspectorate in relation to the historical work undertaken by my office. I also particularly welcome the fact that the report places a spotlight on the larger issue of how society should deal with wider unresolved legacy issues arising from the Troubles."

Mr Hutchinson, who took office four years ago, said he had made a decision about his future and would detail his plans to the committee on Thursday.

But Sinn Fein's Gerry Kelly said: "The buck stops with Al Hutchinson and for public confidence in the ombudsman's office to be repaired, he needs to go and go now. Any delay in his resignation, as he seems to be proposing, will only cause more damage to the office and the public's confidence in it."